These are unprecedented times with many businesses being forced to suspend trading and shut their doors as we wait out the viral pandemic.

The Government has introduced a number of measures to assist businesses through these times, but the inevitable flood of applications has led to many experiencing significant delays before funds arrive.

Faced with this there are several practical steps that you should be taking to protect your business and assist with cash flow.

Robust credit control

Chase debts as soon as they become due; if a customer is experiencing cash flow issues themselves, in view of the current pandemic, it may be sensible to allow a payment plan but if you do it needs be monitored carefully to ensure the terms are adhere to. You may also consider offering a small discount for early settlement.

Invoice discounting could also be considered to free up much needed cash.

Contact suppliers/stakeholders

Continue dialogue with existing customers; consider discussing extending credit terms or a payment plan, if required. If you have existing asset finance or loans, consider extending the terms, to reduce monthly payments, or ask for a repayment holiday. Most lenders will consider a repayment holiday in the current climate.

Taking on additional debt

If you need to borrow further monies it is always best to avoid PGs where possible. Although there are a number of lenders who can provide funds quickly, which may be tempting in such testing times, they will almost always insist on PGs and most will pursue you aggressively in the event of default on repayment of the debt.

In most cases, the Government support outlined above will be preferable if you are eligible and can get it. If you haven’t already, your next step is to talk to your professional advisors and access the suite of measures already put in place. These include:

A 12-month business rates holiday for retail, hospitality, leisure and nursery businesses in England.

Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.

Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

The HMRC Time To Pay Scheme – agreed on a case by case basis with HMRC.

Wrongful Trading

Remember there is currently a three-month suspension, from 1 March 2020, of the wrongful trading provisions effectively removing the threat of personal liability during the Covid-19 outbreak should your company ultimately fail.

If your company is experiencing financial problems, as a result of the Covid-19, please get in touch to discuss your current situation and the options available. Our skilled and experienced team of Insolvency Practitioners will help you find a solution.